Betfair set float price

[Photon]

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David Yu to step down as Betfair chief

By Roger Blitz, Leisure Industries Correspondent

Betfair has ended weeks of speculation by announcing that David Yu would step down as chief executive when his contract expires in October 2012 after 10 years with the betting exchange operator.

Analysts said the decline in the company’s share price since flotation and investor concerns about strategy meant that there was little surprise at the decision to announce succession plans well ahead of Mr Yu’s planned departure date.
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One name likely to be in the frame is Stephen Morana, the chief financial officer.

In a statement, Ed Wray, chairman, said on Monday: “We understand why, after 10 years, David would like to start thinking about the next stage of his career and, in time, hand the reins over to a new CEO.

“The open manner in which we will conduct the search will make it easier for us to find the best candidate for the role.”

Mr Yu said the announcement was to ensure that the succession process could be conducted “actively and transparently”. He has been chief executive for six years.

Betfair floated in October at £13 but the shares have been tumbling recently, reaching a low of 715p on Friday before ending the week at 743p. The shares fell a further 2 per cent lower at 725p in late London trading on Monday.

Nick Batram, analyst at Peel Hunt, described Betfair’s problems as “part due to outside events but also partly self-inflicted”.

The company’s fortunes have declined against a backdrop of uncertainty over gambling regulation in some of its markets. But there have also been problems with Betfair’s product development, notably LMAX, its financial trading platform.

Mr Batram added that Betfair could have been more aggressive in some areas, such as fixed-odds betting, and that “the communication of the story to the City could have been better”.

Betfair reports full-year results on Wednesday, with consensus expectations for revenues of £375m and pre-tax profits of around £30m.

James Hollins of Evolution Securities, who is neutral on the stock, said that while he had a target price of 950p, Betfair remained “a high-risk proposition”

[andyfuller]

Betfair announce plans to buy back £50 million worth of shares:

http://www.guardian.co.uk/business/2011 ... ing-morana

[Iron]

Jumped up: Betfair profits ahead of expectations

http://business.scotsman.com/economics/ ... 6793350.jp

[CaerMyrddin]

A company that is buying back its stocks is full of cash and can't invest it. So, they increased charges, but aren't really investing it in growth. I'd love to see a betfair comercial in a crappy Academica - Paços de Ferreira match, but what I see is Bet365, BetClic and Bet-at-Home getting it all. The least they could do would be to reinvest part of the money in advertising, to bring more punters.

[Euler]

Negative article in the Times today. Read it by the pool this morning but can't see a refereance online anywhere.

[Iron]

An article about the piece:

http://calvinayre.com/2011/07/03/busine ... mpaign=rss

Negative article in the Times today. Read it by the pool this morning but can't see a refereance online anywhere.

[andyfuller]

Doubt this article has done the share price any favours today, currently down 3.5% on the day to a new low of 719p (11.13am) following falls yesterday:

http://www.guardian.co.uk/sport/blog/20 ... -coin-flip

[andyfuller]

New low hit again today - almost broke the 700 mark at one stage

[danum]

BF now below 700p following various sell side downgrades

[andyfuller]

BF now below 700p following various sell side downgrades

Prepare for a new annoucement that the Premium Charge is going up to 90% and on Lifetime profits of £1,000

That values them at £740,000,000 now doesn't it? So they have lost over £740,000,000 in market value in 9 months.

So a loss of about £2,740,740 each day and every day since floatation?

I think they need to go have a long look in the mirror with figures like that!

Anyone got a spare £370,000,001 so we can buy a controlling stake?

[xitian]

Haha, you joke Andy, but share price is now 681p! At this rate it could a real possibility in a few weeks time!

[jimrobo]

you have to seriously wonder what the hell they are going to do if it continues to spiral downwards.

[Euler]

Shouldn't we back it because its steaming?

[Iron]

I think this move is primarily driven by hype and uncertainty. Surely the reason Betfair bought £50 million of their own shares is because they expect the price to rise long-term. So if I were trading Betfair, I'd short it, but close my trade sharpish when the momentum started moving against me.

Jeff

Shouldn't we back it because its steaming?

[Euler]

I think a lot of it is momentum driven, people sell when falling and with a lot of employee share options going down the toilet there is probably still a lot of selling pressure in a thinly traded market.